BOSTON — In an effort to reverse outflows and attract new assets,
American Century Investments is stepping up its efforts to sell mutual funds through financial advisers.
The Kansas City, Mo.-based fund company plans to sell 12 additional funds — including its biggest, Ultra — through advisers only. The move will bring to 39 the number of funds in the adviser-sold lineup.
In addition, American Century plans to standardize the pricing of all its funds sold through investment professionals by adding share classes.
If fund shareholders approve, the changes will take effect in November.
The moves come as American Century is seeing an increasingly bigger proportion of its assets coming through intermediaries.
“That’s the growth engine of our company, and we want to make sure that we have a well-diversified product line for that audience,” said Jill Farrell, director of marketing for na-tional accounts at American Century.
Besides the $10.9 billion American Century Ultra Fund (TWCUX), the additions to the load-only lineup are: American Century California Long-Term Tax-Free (BCLTX), American Century Disciplined Growth (ADSIX), American Century Emerging Markets (TWMIX), American Century Equity Growth (BEQGX), American Century Equity Income (TWEIX), American Century Focused Growth (AFSIX), American Century Global Gold (BGEIX), American Century Heritage (TWHIX), American Century Income & Growth (BIGRX), American Century International Bond (BEGBX) and American Century Real Estate (REACX).
Wheras in 1995, intermediary sales accounted for about 9% of company assets, “now that’s about 57%,” said David Larrabee, who is in charge of field distribution at American Century as senior vice president of territory sales.
“In the last five to eight years at least, the majority of our sales have been through intermediaries,” he added.
American Century could use a growth engine.
Net outflows from the firm’s stock and bond funds totaled $2.62 billion in the first quarter, according to Financial Research Corp., a Boston-based financial services consulting firm. Net outflows totaled more than $8 billion last year, up from $2.5 billion in 2005.
The firm also recently has experienced its share of executive changes.
On March 1, Jonathan S. Thomas, the firm’s former chief financial officer, succeeded William Lyons as president and chief executive.
In addition to Mr. Lyons, who announced his retirement in January, American Century has lost other talent recently — Harold Bradley, chief investment officer of U.S. growth equity for the mid- and small-cap sectors, and David Rose, a senior portfolio manager.
On the hiring side, American Century on May 3 announced that Mark On had joined the firm from Orinda, Calif.-based AXA Rosenberg Group LLC as senior vice president and chief investment officer of international equity.
American Century also soon ex-pects to announce the hiring of a chief investment officer for U.S. equity, spokeswoman Laura Kouri said.
The decline of defined benefit plans is the reason more investors are going to American Century — and other fund companies — through financial advisers, said Geoff Bobroff, a mutual fund industry consultant in East Greenwich, R.I.
“In the world that we live in today, you have defined contribution plans where you have to manage your own investments,” he said.
Aside from the changes expected to take effect in November, American Century has tripled its sales force in the intermediary channel, Mr. Larrabee said. From 2003 to 2005, the firm added 44 staff members — including phone and field representatives — to support intermediary sales, he said.
Once the changes are complete, the 39 funds sold through commission- and fee-based advisers, as well as retirement plans, each will offer A, B, C, R, investor and institutional-class shares. R shares are designed for use in retirement plans, and investor shares are aimed at retail investors and wrap programs.
American Century also will offer 43 no-load funds. Fifteen of those funds will be designed for use by fee-based advisers and retirement plans, and will offer investor, institutional, adviser and R share classes.
The remaining 28 will be aimed at self-directed retail investors and will have only investor class shares.
“We want to make sure that however an investor chooses to work with an adviser, we’ll be able to have a pricing structure to fill that need,” Mr. Larrabee said.
